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Book on Samsung Divides Korea

SEOUL — Life has been a roller coaster for Kim Yong-chul since he began talking about Samsung Electronics two and a half years ago. He has been celebrated by some as a whistle-blower, but in a culture that emphasizes workers’ loyalty to their employers, he has also been vilified as a traitor driven by personal grudges.

That was before Mr. Kim’s 474-page exposé, “Think Samsung,” hit stores in February.

The book makes sensational allegations of extensive corruption by Lee Kun-hee, the richest man in South Korea and the chairman of Samsung Electronics, the world’s largest technology company by revenue.

Samsung is the most sacrosanct — and yet often mistrusted — company in South Korea. Since the book’s release, the country’s major newspapers and Web sites have refused to carry advertisements for it, and few South Korean publications have reviewed it. One newspaper reported on its popularity — it became a best seller, thanks to strong word of mouth on blogs and Twitter — but did not print its title or detail its allegations.

“Isn’t this a comedy?” Mr. Kim, 52, said in an interview. “I am challenging them to slap my face, to file a libel suit against me, but they don’t. They treat me like a nut case, an invisible man, although I am shouting about the biggest crime in the history of the nation.”

“We are seething with anger, but we are not going to sue him and make him a star again,” said Kim Jun-shik, Samsung’s senior vice president for corporate communications. “When you see a pile of excrement, you avoid it not because you fear it but because it’s dirty.”

Mr. Lee was charged with tax evasion and breach of trust in April 2008 and convicted on both charges in what became known as the Samsung slush fund scandal. But he avoided prison and eventually received a presidential pardon and returned to the chairmanship of Samsung.

Though the legal case is over, the country is still grappling with the questions that it raised — and that Kim Yong-chul’s book continues to raise — about Samsung, its place in society and the independence of the country’s news media and justice system.

Under Mr. Lee’s direction, Samsung grew into a conglomerate that generates more than a fifth of South Korea’s exports. It employs 270,000 people around the world and has become synonymous with success, style and pride in South Korea.

Mr. Kim joined the company in 1997 after making his name as a star prosecutor who investigated the corruption of Chun Doo-hwan, the former military strongman. He became Samsung’s top legal counsel before quitting in 2004. He went public with his allegations of wrongdoing three years later.

Even for South Koreans accustomed to corruption scandals, his assertions were staggering.

Mr. Kim accused Mr. Lee and his loyal aides of having stolen as much as 10 trillion won, or $9 billion, from Samsung subsidiaries and stashed it in stock and bank accounts illegally opened in the names of executives.

The book alleges that they shredded books, fabricated evidence and bribed politicians, bureaucrats, prosecutors, judges and journalists, mainly to ensure that they would not stand in the way of Mr. Lee’s illegal transfer of corporate control to his only son, Lee Jae-yong, 41.

In his book, Mr. Kim depicts Mr. Lee and “vassal” executives at Samsung as bribing thieves who “lord over” the country, its government and media. He portrays prosecutors as opportunists who are ruthless to those they regard as “dead” powers, like a former president, but subservient to and afraid of Samsung, which he calls the “power that never dies.”

“I wanted to leave a record of Samsung’s corruption because prosecutors’ investigation turned it into historical gossip,” Mr. Kim said. “I wrote this book because I was afraid that children would grow up believing that in South Korea, justice does not win, but those who win become justice.”

The book has sold 120,000 copies so far — an unusually good performance in South Korea for a nonfiction work.

When Mr. Kim first approached the news media with his allegations, he said, no one wanted to touch the subject. It took a group of outspoken Catholic priests to publicize his claims, forcing an investigation.

Prosecutors uncovered 4.5 trillion won in accounts that violated a law requiring depositors to use their real names; they determined that the money belonged to Mr. Lee, inherited from his father, Lee Byung-chull, who founded Samsung.

But they concluded that there was no evidence of bribery, which astonished Mr. Kim, since he had provided a list of prosecutors whom he said he had helped Samsung bribe while he was working there. In addition, a lawmaker said she had once been offered a golf bag full of cash from Samsung, and a former presidential aide said he had received and returned a cash gift from the company.

Last year, Mr. Lee was convicted of having evaded 46.5 billion won in taxes on profits generated from the hidden money and of having helped his son buy shares of a Samsung subsidiary at an artificially low price. He was sentenced to three years in prison, but a judge suspended the sentence, saying the crime “was not serious enough to merit an actual prison term.”

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After his conviction, Mr. Lee said he was “sorry for causing trouble to the people.” In February, he received a presidential pardon, and a month later he returned to Samsung as chairman, without a board meeting to approve the appointment.

The sequence of events deepened South Koreans’ mistrust of the justice system, following similarly light punishment for the heads of Hyundai, SK, Doosan and Hanwha, all convicted of fraud or other crimes in recent years.

The Grand Prosecutors’ Office has dismissed Mr. Kim’s book as repeating allegations that had been proved “baseless.”

And company officials say the Samsung of today is far more transparent than the Samsung of several years ago that Mr. Kim portrays in his book.

Samsung says it has not used its advertising budget to tame media coverage of Mr. Kim’s allegations. But a rare glimpse of how publications tiptoe around Samsung came in February, when the Kyunghyang daily newspaper rejected a college professor’s column praising Mr. Kim’s book and criticizing Samsung.

The professor, Kim Sang-bong, took his column to an online newspaper. When Kyunghyang reporters raised an uproar, the newspaper published a “confession” admitting that it had rejected the column for fear it might lose Samsung advertisements.

The refusal of newspapers to carry the advertisement for Mr. Kim’s book has actually helped sales, said Kim Tae-gyun, the book’s editor at its publisher, Sahoipyoungnon. Even people who did not want to read it bought copies to show their support, he said.

Sean C. Hayes, an American lawyer and newspaper columnist in Seoul who has worked for the Constitutional Court and taught at a law school here, said he hoped more “brave souls” like Mr. Kim would speak out about corruption “for the benefit of a promising nation that is being choked by corrupt incompetents.”

“The change will have to come from the masses,” he added, “since elite power centers have a firm grasp on most government entities through implicit guarantees that evils will only be dealt with by a little slap on the wrist.”

Mr. Kim said his decision to go public with his allegations against Samsung had exacted a heavy personal price. He said acquaintances had cut off contact with him, and when he gave a lecture at a law school this month, students asked whether attending might jeopardize job opportunities.

“People call me a betrayer,” said Mr. Kim, a classical-music buff who likes to swill espresso. “Others consider me be their avatar, who did something they wanted to but couldn’t.”

Nevertheless, he says his battle is far from over. He is working with activists organizing a boycott of Samsung products.